COl""
March 1991
A.E. Ext. 91-3
The National Dry Onion Market: A Monthly
Analysis of New York State's Competitive
Position in Eastern Markets
Enrique E. Figueroa
Department of Agricultural Economics
New York State College of Agriculture and Life Sciences
A Statuatory College of the State University
Comell University, Ithaca, New York, 14853-7801
•
It is the policy of Cornell University actively to support equality
of educational and employment opportunity. No person shall be
denied admission to any educational program or activity or be
denied employment on the basis of any legally prohibited dis­
crimination involving, but not limited to, such factors as race,
color, creed, religion, national or ethnic origin, sex, age or
handicap. The University is committed to the maintenance of
affirmative action programs which will assure the continuation
of such equality of opportunity.
...
THE NATIONAL DRY ONION MARKET: A MONTHLY ANALYSIS OF
NEW YORK STATE'S COMPETITIVE POSITION IN EASTERN MARKETS
by
Enrique E. Figueroa
•
Assistant Professor of Agricultural Economics
Cornell University, Ithaca, N.Y.
14853
ACKNOWLEDGEMENTS
I would like to thank the New York state Onion Industry Research
and Development Program for financially supporting this research.
Mr.
Donald Nielson from New York state Agriculture and Markets for his
courteous assistance in administering the project as well as for his
helpful comments regarding some of the date utilized in the project.
However, the author takes sole responsibility for the paper.
-
TABLE OF CONTENTS
..
I.
Introduction.
II.
National Market
IIA. Competition
lIB. Time Period
...
· · · · ·
· · · · · ·
..
...
.........
·
. . · . . . ·
Differences .
·
·
·
·
1
2
·
8
· · · · ·
8
III. Other Eastern Markets •
· 16
·. ..
·......
IV.
Eastern Market's Price Analysis
IVA.
Atlanta
IVB.
Baltimore •
IVC.
Boston. •
IVD.
Buffulo.
IVE.
New York City
IVF.
Philadelphia. .
• 30
IVG.
Pittsburgh. .
• 33
IVH.
Direct Weekly comparison. •
• • 22
• • 24
· 26
•
•
•
•
• 26
· 26
30
•
•
• 33
IVI. Summary and Conclusions .
36
Bibliography . . • . . . .
• 39
-
,
THE NATIONAL DRY ONION MARKET: A MONTHLY ANALYSIS OF
NEW YORK STATE'S COMPETITIVE POSITION IN EASTERN MARKETS
I. Introduction
Between 1982 and 1988 dry storage onion production in New York
averaged 3,432,000 cwt with a high of 4,550,000 cwt in 1982 and
a low of 2,793,000 cwt in 1983. However, the year-to-year changes
in production have declined, on average, 5.5%. Over the same time
period, national dry storage-onion production has averaged nearly
34,000,000 cwt and the average annual change in production has been
a 5.6% increase. New York's share of the national market has been
10.1%, but New York onion producers have not benefitted from the
expansion of the national market. Why? In this report, an attempt
is made to shed light on the answer.
ha~
within the vegetables category, the value of production of
onions in New York ranks second only to potatoes. The value of
production in 1988 was nearly $40 million and has averaged nearly
$41 million over the past five years.
It is a significant industry
in Orange county with Genessee, Madison, Orleans, and Oswego as
other producing counties. These five counties grow more than 90% of
all onions produced in the state. Producers in these counties have
recognized that their share of the national market has been eroding
and that something needs to be done before their presence in the
market is no longer a significant factor.
In an earlier report which utilized weekly data between February
1987 and March 1988, the author presents a similar analysis to this
report. Among the findings of the previous report were: New York
had 6% of the national storage onion market; the first and fourth
quarters of the year are New York's primary marketing periods; Idaho
and Oregon onions were New York's main head-to-head competitors; the
Boston and Baltimore markets were New York's strongest and most
stable markets; and that New York suppliers did not have a large
share of the New York City market. One limitation of the previous
report was the rather short time period used as a basis for the
report. Though a weekly analysis provides far more seasonal detail,
the year chosen for the analysis may not be representative of the
structure of the market. Also, the previous report did not utilize
prices--it was strictly a market share approach.
This report expands on the previous report in two significant
ways:
1.) the time period of the analysis is monthly rather than
weekly and therefore the total time period is enlarged to seven
years rather than one and 2.) prices as well as volumes are
analyzed.
It uses the same data sources as the previous report and
is presented in a similar format.
The specific objectives are to
describe and analyze the competitive position of New York onions in
the national "Shipments" market as well as its' position in various
eastern u.S. "Arrival" markets. The report first describes the
national market; New York's competitive position in the national
market as well as in specific eastern u.S. terminal markets; and
­
2
then onion prices for various suppliers to eastern
markets are analyzed.
II.
~he
u.s.
terminal
Bationa1 Market
_.As mentioned earlier, the data sources for the analysis are the
same utilized by Figueroa [1] in the previous report. Shipment data
are from the USDA [4] as are arrival data [3]. Table I presents
average monthly shipments during the year and by quarter by the
major dry onion suppliers in the country as well as Canada & Mexico.
According to the USDA, shipment data captures approximately 90% of
all shipments. To verify the USDA's assertion, a comparison was
made between total U.S. storage onion production data and total U.S.
shipment data for the seven years--1982 to 1988. Given that the
industry operates under the assumption of 13.5% shrinkage and waste
between harvest and pack-out, then the shipment data used in this
study reflects 95% of production. Indeed, a better figure than what
the USDA asserts.
Compared to average monthly shipments for the entire year, New
York shipments in the first and last quarters are 47.8% greater
while second quarter shipments are 72.2% less and third quarter
shipments are 23.4% less. Alternatively, quarterly New York and
competitor dry onion shipments as percent of total annual shipments
are:
_______________ ,
SHIPPING STATE I
,
I
I
1
II
I
1
III
I
1
IV
I
---------------I--------I--------!--------!--------I
NEW YORK
37.0%
7.0%
19.1%
36.9%
COLORADO
23.2
1.0
32.5
43.3
IDAHO
35.1
1.1
16.2
47.7
MICHIGAN
39.9
1.5
15.5
43.1
OREGON
38.6
2.5
17.7
41.1
WASHINGTON
25.5
6.5
36.4
31.6
---------------------------------------------------
Michigan and Oregon have the most similar annual shipment
distribution to New York's. New York is the fifth largest supplier
included in Table I and the third largest supplier when California
and Texas (primarily II and III quarter suppliers) are excluded.
Total shipments during each of the last three quarters are about
2.45 million cwt, while first quarter shipments are 1.96 million
cwt.
•
Table I ... AVERAGE MONTHLY U.S. DRY ONION SHIPMENTS--JANUARY 1982-DECEMBER 1988
SHIPPING
STATE
YEAR
JANUARY­
MARCH
TIME PERIOD
APRIL­
JUNE
JULY­
SEPTEMBER
OCTOBER­
DECEMBER
--1,000 CWT.-­
CALIFORNIA
390.35
72.19
748.86
571.33
169.0
COLORADO
255.44
237.19
10.14
331. 57
442.86
IDAHO
212.32
297.76
9.14
137.48
404.90
MICHIGAN
122.33
195.05
7.57
75.91
210.81
NEW YORK
250.42
370.19
69.71
191. 71
370.05
OREGON
303.15
468.10
30.00
216.62
497.90
TEXAS
350.12
71. 43
1,000.29
328.67
0.10
WASHINGTON
122.21
124.62
32.00
177.90
154.33
CANADA AND
MEXICO
142.45
336.29
164.00
20.19
49.33
OTHER U.S.
324.12
121.29
525.86
415.81
233.52
2,330.46
1,957.81
2,433.57
2,447.00
2,483.48
TOTALS
I
w
4
Table II presents total u.s. arrival data. Arrivals represent
approximately 42% of total shipments and the comparable quarterly
figures are: 1=45.5%, 11=41.6%, 111=42.6%, and IV=38.9%. In short,
the 22 cities reported by the USDA receive less than half of all
onions shipped within the U.S. Because arrival data includes
arrivals from countries other than Canada and Mexico and because
shipment data only reports U.S. shipments (Florida and Texas only
report interstate shipments), it is therefore difficult to derive a
precise relationship (percent) between arrivals and shipments.
However, for comparisons of shares and/or changes in sources of
supply, arrival data can be used more justifiably than absolute
volume comparisons.
Of the eastern markets, New York City is the largest terminal
market receiving onions. It is followed by Boston, Atlanta,
Philadelphia, and Baltimore. Buffalo is the smallest while
Pittsburgh is the next smallest. Except for Atlanta and New York
City, very little differences exist between quarters of the year for
any of the markets. As pointed out by some New York growers,
Atlanta is considered a "dump" market and as such one would expect a
larger variation in arrivals. New York City is not necessarily a
"dump" market, but since it is the largest, many growers send
product to the market as "rollers" and/or consignment when there is
oversupply. The seven eastern cities in Table II represent 43.3% of
all U.s. arrivals and New York City alone represents 13.1%. Given
the figures in Tables I & II, what can be said about the share
distributions of suppliers and receivers?
Tables III and IV present shipper and arrival shares,
respectively. Over the entire year, the eight states and Canada &
Mexico ship 87% of all onions in the U.S. During the II and III
quarters, the percentage drops to 80% and 83%, respectively. New
York onions maintain the second largest national share in the first
quarter and the fourth largest share in the fourth quarter. New
York is not a major supplier in the other two quarters. Based on
the widest distribution of shares, the first quarter is the most
competitive quarter while the second quarter is the least
competitive. Since average shipments during the fourth quarter are
526,000 cwt more than during the first, an implication may be that
storage capacity and/or storage costs preclude longer storage (the
major states supplying during the IV and I quarters harvest during
the fall). Alternatively, if growers know that the first quarter is
the most competitive quarter, then they may choose to move more
product during the less competitive fourth quarter. The reason for
shipping more product during the fourth quarter, as compared to the
first, is an important research theme for the future.
The shares presented in Table IV depict stable markets
over the entire year. The seven cities vary in size, income,
demographics, are geographically dispersed and therefore represent a
broad consumer profile and one that most likely is representative of
national demand for dry storage onions.
•
Table II ... AVERAGE MONTHLY U.S. DRY ONION ARRIVALS--JANUARY 1982-DECEMBER 1988
ARRIVAL
MARKET
YEAR
JANUARY­
MARCH
TIME PERIOD
APRIL­
JUNE
JULY­
SEPTEMBER
OCTOBER­
DECEMBER
--1,000 CWT-­
ATLANTA
70.30
60.95
78.86
77.38
64.00
BALTIMORE
49.36
47.67
50.90
52.48
46.38
BOSTON
81. 67
76.67
79.71
89.19
81.10
9.98
9.38
9.57
10.29
10.67
128.23
128.10
118.24
130.90
135.67
PHILADELPHIA
56.98
58.29
54.29
59.76
60.57
PITTSBURGH
26.44
25.19
26.33
27.62
26.62
555.44
490.52
594.29
595.62
541. 33
978.38
891.76
1,012.19
1,043.24
966.33
BUFFALO
NEW YORK
CITY
OTHER CITIES
TOTALS
I
U1
Table III ••• AVERAGE MONTHLY DRY ONION S-,-H_I_PPE_'_R_t1ARKET SHARES OF TOTAL U.S. IDRY ORIOK
MARKET--JANUARY 1982--DOCEMBER 1988
TIME PERIOD
SHIPPING
YEAR
JANUARY­
APRIL­
MARCH
JUNE
JULY­
SEPTEMBER
OCTOBER­
DECEMBER
--PERCENT-­
CALIFORNIA
15.3
3.1
27.9
23.4
6.9
COLORADO
10.3
10.5
0.5
13.1
17.3
IDAHO
8.6
12.9
0.4
5.4
15.9
MICHIGAN
5.1
8.7
0.3
3.0
8.5
NEW YORK
10.6 .
16.6
3.0
7.7
15.0
OREGON
12.4
20.2
1.3
8.5
19.6
TEXAS
14.0
3.1
39.0
13.8
0.0
WASHINGTON
5.0
5.4
1.3
7.2
6.0
CANADA &
MEXICO
6.0
14.4
6.6
0.8
2.0
OTHER U.S.
12.7
5.1
19.7
17.0
8.9
TOTALS
100.ot
100.0'
99.9'
I
100.0t
100.1'
0\
Table IV ... AVERAGE MONTHLY DRY ONION ARRIVAL SHARES AS PERCENT OF
TOTAL U.S. ARRIVALS--JANUARY 1982-DECEMBER 1988
ARRIVAL
MARKET
YEAR
JANUARY­
MARCH
TIME PERIOD
APRIL­
JUNE
JULY­
SEPTEMBER
OCTOBER­
DECEMBER
--PERCENT-­
ATLANTA
7.2
6.8
7.8
7.4
6.6
BALTIMORE
5.1
5.3
5.0
5.0
4.8
BOSTON
8.4
8.6
7.9
8.6
8.4
BUFFALO
1.0
1.1
0.9
1.0
1.1
13.1
14.4
11. 6
12.5
13.8
PHILADELPHIA
5.9
6.0
5.4
5.7
6.3
PITTSBURGH
2.7
2.8
2.6
2.7
2.8
56.7
54.9
58.7
57.0
56.1
99.9%
99.9%
99.9%
99.9%
NEW YORK
CITY
OTHER
TOTALS
I
100.2%
....J
8
XX.A. Competition
A total of eighty-four (84) months are included in the data
series. With this size number of observations, it is appropriate to
use "correlation coefficients" (c.c.'s) to estimate the degree of
correlation between two variables. For example, if shipments from
New York and Idaho move in the same pattern from
one-month-to-another, then the correlation is positive and
high--close to 1.0--and Idaho and New York are said to be
competitors. If on the other hand, shipments are not correlated--do
not show a pattern--then the c.c. is equal to zero. Lastly, if the
shipments move in different directions--Idaho is decreasing
shipments while New York is increasing them--then the c.c. is close
to -1.0 and they are not competitors. Table V presents the c.c.'s
between the shipping states and Canada & Mexico. The selection of a
value of the c.c. which indicates a high correlation is somewhat
arbitrary and a function of the variables which one is comparing.
For national onion shipments, a figure greater than 10.801 would
indicate a strong correlation. As might be expected, the highest
positive correlation is between Idaho and Oregon onion
shipments--O.93. One could say that they are competitors, but since
a federal market order exists for Idaho and Oregon (Mulheur County)
onions, then they really are not. The strongest competitor to New
York is Michigan with a c.c. of 0.84 and the strongest
competitor to Michigan is Idaho--c.c. equal to 0.87. The table
makes it very evident that both California and Texas are not
competitors with the fall and winter supply states--negative c.c.'s.
California's major competitor is "Other States"--0.82.
Table VI also presents a c.c. matrix, but these coefficients
represent arrivals at New York City from the various sourcing
regions. One would not expect c.c.'s of the magnitude of shipment
c.c.'s because both bi-lateral supply and bi-lateral demand factors
influence these correlations. The shipment c.c.'s are primarily
influenced by supply forces. Therefore, a c.c. of 10.65\ or greater
is considered a value indicating strong correlation. As such, only
Oregon and Idaho arrivals are positively correlated--0.78--while the
other significant c.c. 's are negative. The negative correlations
all make intuitive sense: California arrivals are negatively
correlated with Colorado, New York, and Oregon arrivals; and Texas
arrivals are negatively correlated with Idaho and Oregon arrivals.
New York arrivals in New York City are not strongly positively
correlated (i.e. competitor) with any other sourcing region.
XI.B. Time Period Differences
Between January 1982 and December 1988, the national market
position held by New York onion producers changed. Figure 1
presents a graphical illustration of New York onion shipments during
1982-1983 and 1987-1988. Although it is not very obvious, total
shipments did decrease between the beginning of the time period and
­
Table V... CORRELATION COEFFICIENT MATRIX FOR TOTAL U.S. MONTHLY DRY ONION SHIPMENTS-­ JANUARY , 82-DECEMBER '88
CALIF.
COLO.
IDAHO
MICH.
N.Y.
OREG.
TEXAS
WASH.
CANADA
& MEXICO
OTHER
STATES
CALIFORNIA
COLORADO
-.58
IDAHO
-.75
.77
MICHIGAN
-.71
.67
.87
NEW YORK
-.79
.59
.75
.84
OREGON
-.80
.72
.93
.81
.78
.32
-.70
-.77
-.71
-.54
-.75
WASHINGTON
-.09
.32
.32
.17
.10
-.36
-.47
CANADA &
MEXICO
-.41
-.30
-.01
.06
.22
.17
.14
-.16
.82
-.36
-.57
-.60
-.77
-.65
.13
.10
TEXAS
OTHER STATES
~
.48
Table VI ••• CORRELATION COEFFICIENT MATRIX FOR MONTHLY DRY ONION ARRIVAIS IN
JANUARY 1982-DECEMBER 1988
CALIF.
COLO.
IDAHO
MICH.
N.Y.
OREG.
TEXAS
WASH.
JEW YORK
CANADA
, MEXICO
CITY-­ OTHER
STATES
CALIFORNIA
COLORADO
-.70
IDAHO
-.61
.00
MICHIGAN
-.43
-.05
.36
NEW YORK
-.65
.26
.13
.40
OREGON
-.65
-.07
.78
.28
.27
~
0
TEXAS
.40
-.22
-.67
-.33
-.37
-.65
WASHINGTON
.01
.16
.02
.02
.10
-.03
-.10
-.24
-.03
.22
.60
.25
.03
-.16
-.06
.40
-.16
-.42
-.33
-.48
-.45
.15
.18
CANADA ,
MEXICO
OTHER STATES
I
-.21
11
the end. Mean monthly New York shipments during the first 24-months
were 283,000 cwt while during the last 24-months they were only
209,000 cwt--a 26% decline. Figure 2 illustrates the national
market shipment shares maintained by New York shipments during 1982
to 1983 and 1987 to 1988. As compared to Figure 1, the time period
differences are more evident. During the first two years, New
York's mean national market share was 13.4% while during the last
two years it was only 7.8%--a 41.8% decline! Since the percent
decrease in market share is greater than the percent decrease in
shipments, one can conclude that the growth in the national onion
market was captured by states other than New York.
Figures 3 and 4 illustrate the New York city onion terminal
market.
Figure 3 shows the shipment market share New York City
represents of total New York shipments. Again, graphically it is
not very evident how the two time periods differ, but the mean share
during the first two years was 17.5% while during the latter two
years it was only 5.6%. However, the first time period is skewed by
the August 1983 share--87%. If one does not include that month,
then the mean for the first time period is 14.4%. Using the mean
which excludes August 1983, then the mean market share New York City
represents of total New York shipments declined by 17.7% between
1982-1983 to 1987-1988. Figure 4 illustrates the market share New
York suppliers maintain in the New York City market. Graphically, it
is very evident how the shares changed over time.
During the first
two years the mean share was 40.7% while during the last two years
it was only 12.8%--a 68.5% decline! The New York City market was
"lost" by New York suppliers over a relatively short time
period--1982-83 to 1987-88. Why did New York suppliers lose such a
large market share? Was it the competition or was it that New York
producers chose to move to different markets? This outcome is
particularly troubling because the New York City market is the
largest market. One should note, however, that the arrival data
most likely does not provide the whole picture with regards to how
many New York produced onions are actually consumed within the
state. Nonetheless, there is nothing that indicates that New York
City arrival data would progressively report less arrivals from New
York State. Therefore, the decline in market share is indicative of
a structural change in market position. The answer to why the loss
in market share took place begs for further research--for it may
shed light in protecting and/or maintaining current market shares.
The national onion market grew from an average of 2,178,400 cwt
per month during 1982 to a monthly average 2,768,000 cwt during
1988--a 27% increase. Over the entire 84-months, the average
monthly change in national onion shipments was +1.69%. Conversely,
New York's average monthly onion shipments during 1982 were 317,300
cwt while during 1988 they were 200,250 cwt--a 36.7% decrease. One
cannot properly generate an average monthly change in New York onion
shipments because during a number of months (18) shipments were
•
12
PIGURB 1.
'l'OTAL SHIPMENTS OP
nw
YOU DRY OBIOBS
MONTH
1.QQQ CWT.
1982:1
1982: 2
1982:3
1982:4
1982:5
1982:6
1982:7
1982:8
1982:9
1982:10
1982:11
1982:12
1983:1
1983:2
1983:3
1983:4
1983:5
1983:6
1983:7
1983:8
1983:9
1983:10
1983:11
1983:12
1987:1
1987:2
1987:3
1987:4
1987:5
1987:6
1987:7
1987:8
1987:9
1987:10
1987:11
1987:12
1988:1
1988:2
1988:3
1988:4
1988:5
1988:6
1988:7
1988:8
1988:9
1988:10
1988:11
1988:12
•
•
•
•
•
•
•
•
•
•
•
•
•
/
/
I
I
I
I
I
I
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
560
403
433
177
0
0
0
249
553
496
471
466
520
447
435
251
0
0
0
68
231
304
379
364
367
290
343
140
0
0
31
179
367
317
315
296
336
250
372
180
0
0
0
130
279
277
293
286
•
13
I'IGURB 2.
52. YORK'S SHARE OF TOTAL DTIOHAL DRY OHIOH SHIPMENTS
MONTH
PERCENT
1982:1
1982:2
1982:3
1982:4
1982:5
1982:6
1982:7
1982:8
1982:9
1982:10
1982:11
1982:12
1983:1
1983:2
1983:3
1983:4
1983:5
1983:6
1983:7
1983:8
1983:9
1983:10
1983:11
1983:12
1987:1
1987:2
1987:3
1987:4
1987:5
1987:6
1987:7
1987:8
1987:9
1987:10
1987:11
1987:12
1988:1
1988:2
1988:3
1988:4
1988:5
1988:6
1988:7
1988:8
1988:9
1988:10
1988:11
1988:12
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
/
/
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
0.27
0.26
0.20
0.08
0
0
0
0.12
0.23
0.24
0.23
0.23
0.24
0.24
0.20
0.11
0
0
0
0.03
0.09
0.12
0.16
0.16
0.13
0.14
0.14
0.06
0
0
0.00
0.07
0.13
0.11
0.12
0.10
0.11
0.11
0.13
0.06
0
0
0
0.05
0.09
0.10
0.11
0.10
•
14
I'IGtJU 3.
lID YOU CITY'S SHARB OJ'
nw
YOU'S IfOTAL DRY 0111011 8BIPKENTS
MONTH
PERCENT
1982:1
1982:2
1982:3
1982:4
1982:5
1982:6
1982:7
1982:8
1982:9
1982:10
1982:11
1982:12
1983:1
1983:2
1983:3
1983:4
1983:5
1983:6
1983:7
1983:8
1983:9
1983:10
1983:11
1983:12
1987:1
1987:2
1987:3
1987:4
1987:5
1987:6
1987:7
1987:8
1987:9
1987:10
1987:11
1987:12
1988:1
1988:2
1988:3
1988:4
1988:5
1988:6
1988:7
1988:8
1988:9
1988:10
1988:11
1988:12
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
/
/
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
0.13
0.19
0.18
0.27
0
0
0
0.25
0.16
0.17
0.18
0.20
0.16
0.15
0.19
0.26
0
0
0
0.87
0.32
0.19
0.16
0.16
0.07
0.08
0.06
0.11
0
0
0
0.06
0.08
0.08
0.11
0.10
0.07
0.10
0.05
0.18
0
0
0
0.02
0.02
0.05
0.05
0.06
..
16
zero. It is
expansion of
addition, in
country--New
clear that other supply states benefitted from the
the national onion market and New York did not. In
the New York City market--the largest in the
York suppliers lost significant market share.
__ - In the following section, a closer look at the other eastern
markets is presented and how New York and its competitors fared in
those markets.
III. other Bastern Markets
Table VII presents the arrival market shares, monthly averages
based on the entire year as well as per quarter, held by New York
arrivals in the seven eastern cities. The shares indicate the
market penetration of New York onions in each of the markets. The
reader should refer back to Table IV and recognize that the seven
markets only represent, on average, 43.3% of total U.S. onion
arrivals. Over the entire time period, New York maintains
relatively large market share positions in all the cities except
Atlanta and Pittsburgh--2.8% and 19.2%, respectively. The largest
position is held in Buffalo--32.6%--followed by Boston and New York
CitY--27%--and Baltimore and Philadelphia--24.9% and 23.4%,
respectively. In fact, during the first quarter of the year, New
York has 50% of the arrival market in Buffalo! Unfortunately, the
market position deteriorates over the time period of the study.
The following presents the same information as does Table VII,
except the monthly averages are calculated for only 1982, 1988, and
the percentage change between the two years. Even if one argues
that 1982 was a very good year for New York shippers and that 1988
was a very bad year, the market share losses are startling given the
relatively short time period--six years. What happened?
____________________ I,
CITY
I
ATLANTA
BALTIMORE
BOSTON
BUFFALO
NEW YORK CITY
PHILADELPHIA
PITTSBURGH
1982
1988
1I
I
.
--Percent-­
9.4%
0.4%
36.1
15.4
34.5
0.2
48.6
0.0
42.9
11.2
34.2
18.3
24.8
15.6
1I
% CHANGE _
I
-95.7%
-57.3
-99.4
-100
-73.9
-46.5
-37.1
The Boston, BUffalo, and New York City markets are the three
markets in which New York shippers lost the largest percentage
market shares (the loss in Atlanta was large, but the Atlanta market
is rather insignificant as far as New York shippers are concerned).
TABLE VII ... AVERAGE MONTHLY DRY ONION ARRIVAL MARKET SHARES HELD BY NEW YORK STATE
ARRIVALS--JANUARY 1982-DECEMBER 1988
ARRIVAL
CITY
YEAR
JANUARY­
MARCH
TIME PERIOD
APRIL­
JUNE
JULY­
SEPTEMBER
OCTOBER­
DECEMBER
--PERCENT-­
ATLANTA
2.8
4.8
0.2
3.3
2.8
BALTIMORE
24.9
36.7
8.1
18.4
36.4
BOSTON
27.3
40.5
9.5
20.6
38.6
BUFFALO
32.6
50.1
23.1
16.9
40.3
NEW YORK CITY
27.8
37.2
19.7
20.8
33.7
PHILADELPHIA
23.4
34.2
12.5
19.1
27.8
PITTSBURGH
19.2
25.0
17.4
12.7
21.9
9.0
16.1
1.8
5.7
12.4
OTHER CITIES
I-'
-..J
18
In the Boston market, New York lost 34.3 (34.5% - 0.2%) share points
between 1982 and 1988. What states gained in market share? Idaho
increased its market share position from 14.2% to 21.5' and "Other
states" increased their position from 6.7% to 32.6%. In essence,
these two suppliers increased their share position by 33.2
points--what New York lost. Although it is difficult to pinpoint,
but most likely Georgia "Vidalia" onions captured a significant
share between 1982 and 1988. Though terminal market reports
indicate zero New York arrivals in Buffalo, the author considers
this a suspect figure. Nonetheless in the Buffalo market, New York
lost 48.6% (went to zero) share points between 1982 and 1988. The
gainers in descending order were: "Other States" -= 24.1, Idaho =
10.9, Colorado = 6.0, California = 5.1, and Oregon = 4.3. Since
California generally does not compete with New York during the same
months, then the other sourcing regions were the beneficiaries of
New York's losses. Lastly, in the New York City market, New York
lost 31.7 share points between 1982 and 1988. A much different
picture develops in this market. For example, "Other states" also
lost market share--2.0 points--whereas in the Boston and BUffalo
markets the "Other states" were the largest gainers. California is
the second largest gainer--9.5 points--and therefore indicates that
it competed directly with New York. This is an odd outcome because
historically the two states have supplied the market during
different parts of the year. The largest gainer in New York City
was Idaho--18.5 points--followed by Oregon--6.1 points.
What can be said about the suppliers that took over the market
shares that New York lost? First, other sourcing states entered the
market--particularly Georgia. Idaho and Oregon generally supply a
"jumbo ll sweet-spanish onion and therefore one can surmise that the
demand for this type of product lead to the gains at the expense of
New York's "large" or "medium-repacker" yellow-globe onions. At
this point, it is difficult to speculate why the Boston and Buffalo
markets were different than the New York City market in terms of
what sourcing states ended up with the market shares New York lost.
Further study on this particular question would assist New York
producers in formulating their strategies for future market
maintenance and/or penetration.
The preceding indicated how important New York onions were in
particular eastern markets. An ancillary question is how important
are these markets to New York suppliers. That is, which markets buy
relatively more/less onions shipped by New York.
Table VIII presents the average monthly shipment shares received
by the various eastern markets. The reader should remember that
"arrival" data on average represents 42% of II shipment II data.
Therefore the figures in Table VIII appear to be small, but if they
add up to 42%, then the seven cities received 'all' of New York's
shipments. The average monthly arrival shares for the seven cities
Table VIII ... AVERAGE MONTHLY DRY ONION ARRIVAL SHARES AS PERCENT OF TOTAL NEW YORK
STATE SHIPMENTS--JANUARY 1982-DECEMBER 1988
.
ARRIVAL
CITY
YEAR
JANUARY­
MARCH
TIME PERIOD
APRIL­
JUNE
JULY­
SEPTEMBER
OCTOBER­
DECEMBER
--PERCENT-­
ATLANTA
0.5
0.7
0.1
0.8
0.4
BALTIMORE
3.5
4.6
1.5
3.6
4.4
BOSTON
6.7
8.3
3.1
7.4
8.1
BUFFALO
1.3
1.2
0.7
2.1
1.1
NEW YORK CITY
11.2
12.4
6.5
14.5
11.3
PHILADELPHIA
5.1
4.9
2.2
8.8
4.5
PITTSBURGH
1.5
1.7
.L...1
.LJi
1.6
29.6%
33.8%
15.2%
39.0%
31. 4%
TOTAL
f-'
\0
20
for the entire year is 29.6% of all New York shipments. During the
third quarter the figure is 39.0%--i.e., almost all of the
'reported' arrivals from New York are to the seven cities!
Even though New York has deteriorated its market position in New
city, the city is still the most important market for New York
suppliers. It is important because it represents such a large
volume--a monthly average of 128,226 cwt. The other market's average
monthly arrivals are (in descending order): Boston = 81,667 cwt,
Atlanta = 70,298 cwt, Philadelphia = 56,976 cwt, Baltimore = 49,357
cwt, Pittsburgh = 26,440 cwt, and Buffalo = 9,976 cwt. The fourth
and first quarters of the year are when New York primarily markets
its onions and there is no discernable difference in share
allocation between the two quarters. Within the year, the seven
cities represent stable markets for New York shippers and they
represent the markets where 71% of New York onions arrived.
Yo~
Table IX presents a somewhat different market share approach.
Contrary to the figures in Table VIII, the figures in Table IX are
all a function of arrivals. That is, of all the arrivals in New
York City, what percent came from each supplying region? Between
1982 and 1988, New York onions have the largest average monthly
share--27.8%. The most surprising figures are the shares maintained
by New York during the second and third quarters--19.7% and 20.7%,
respectively. No doubt, most sales in the second quarter are in
April while most sales in the third quarter are in September.
However, an important question is how the figures in Table IX
changed between 1982 and 1988. What follows are the average monthly
shares for each year:
SUPPLY STATE
I
1982
I
1988
I
% CHANGE
--------------------!------------!------------I-----------­
--Percent-­
CALIFORNIA
COLORADO
IDAHO
MICHIGAN
NEW YORK
OREGON
TEXAS
WASHINGTON
CANADA & MEXICO
OTHER U.S.
10.5%
1.9
10.1
0.7
42.9
11.3
14.5
0.1
0.1
7.8
20.0%
1.1
28.6
0.1
11.2
17.4
16.2
0.1
0.0
5.8
+90.5%
-42.1
+183.2
-85.7
-73.9
+54.0
+11.7
-25.6
Table IX ... AVERAGE MONTHLY DRY ONION ARRIVAL MARKET SHARES HELD BY VARIOUS SHIPPERS
IN NEW YORK CITY--JANUARY 1982-DECEMBER 1988
ARRIVAL
SOURCE
YEAR
JANUARY­
MARCH
TIME PERIOD
APRIL­
JUNE
JULY­
SEPTEMBER
OCTOBER­
DECEMBER
--PERCENT-­
CALIFORNIA
14.3
0.8
20.4
34.2
1.7
2.3
0.9
0.2
5.4
2.8
19.7
31.3
3.5
8.3
35.5
MICHIGAN
1.1
2.2
0.5
0.2
1.5
NEW YORK
27.8
37.2
19.7
20.7
33.7
OREGON
14.4
25.2
3.7
6.0
22.8
TEXAS
15.6
0.6
45.4
16.4
0.0
WASHINGTON
0.6
0.3
0.1
1.2
0.7
CANADA AND
MEXICO
0.4
0.7
0.2
0.1
0.5
OTHER U.S.
6.0
.L..l
11.8
10.1
0.9
100.3%
105.5%
102.7%
COLORADO
IDAHO
TOTALS
102.2%
*--Data inconsistencies and rounding errors lead to figures greater than 100%
100.1%
'"
i->
22
New York drops to the fifth--11.2%--position in market share during
1988 whereas it held the number one position in 1982--42.9%. The
leading suppliers during 1988 were: Idaho, California, Oregon and
Texas. Idaho increased its market position by nearly 185% over the
six-year period and most likely all at the expense of New York.
Table X presents the shares of total shipments represented by
arrivals in the New York City market. The shares are stable over
the year with the exception of the following: the third quarter is
relatively more important for California and the fourth quarter is
the most important for Canadian & Mexican shipments. Only New York
relies on New York City for more than 10% of its total shipments.
The national dry storage onion shipment market grew at an
average rate of 1.7% per month between January 1982 and December
1988. New York producers did not benefit from the expansion of the
market and in fact lost significant market share over the time
period. The principal beneficiaries from the expansion of the
market were Idaho, California, Oregon, and "Other states". In the
New York City market, the largest terminal market in the country,
New York shippers went from a 43% market share in 1982 to an 11.2%
in 1988. It appears that demand for a larger, "jumbo",
sweet-spanish-type onion led to the decline of New York's position
in the market.
xv.
Eastern Markets' Price Analysis.
Price analysis is the most difficult undertaking of the report.
The first problem is identifying the appropriate price series on
which to base the analysis. Since the report primarily is concerned
with the competitive position of New York onions, an appropriate
price would be one which is relevant to New York shippers.
Secondly, should the price data be monthly or weekly and if it is
monthly, how are the inter-month price variations captured? Should
prices be analyzed for all sizes and types of onions--'colossal',
'jumbo's', 'large', 'medium', and/or 'repacker': 'sweet-spanish',
'yellow-globe', 'reds', 'grano', and/or 'granex'? Should grower
price, f.o.b. price, terminal market receiving price, or retail
price be analyzed? And lastly, which source(s) should be utilized
for the analysis? The decisions were not easy to make for arguments
could be generated for alternative decisions.
The availability of good price data was the fundamental force
guiding the decisions. The second guiding principle was the type
and size onions that compete with New York onions. The decision
between weekly and monthly data was for weekly data. Monthly data
would miss some of the significant variations within a month. Since
New York mostly markets a 'large' orlmedium/repacker' onion, then
this size onion price was used for New York onions. For the western
states, california, and Texas the 'jumbo' and 'large' prices were
used. For Michigan, the 'large' and 'medium/repacker' price was
v
.
Table X... AVERAGE MONTHLY DRY ONION TOTAL U.S. SHIPMENT MARKET SHARES REPRESENTED BY
NEW YORK CITY ARRIVALS-JANUARY 1982-DECEMBER 1988
SOURCE OF
SHIPMENT
YEAR
JANUARY­
MARCH
TIME PERIOD
APRIL­
JUNE
JULY­
SEPTEMBER
OCTOBER­
DECEMBER
--PERCENT-­
CALIFORNIA
3.3
1.2
2.7
7.2
1.9
COLORADO
0.7
0.3
0.0
1.7
0.8
IDAHO
9.7
14.0
9.2
3.9
11.8
MICHIGAN
0.8
1.3
0.6
0.5
0.8
NEW YORK
11.2
12.4
6.5
14.4
11.3
OREGON
5.1
7.2
4.8
2.0
6.3
TEXAS
4.7
0.7
7.5
10.7
0.0
WASHINGTON
0.5
0.3
0.3
0.9
0.6
CANADA AND
MEXICO
6.2
0.3
0.0
5.0
19.6
OTHER U.S.
0.7
2.4
0.0
2.4
0.5
N
w
24
used. Lastly, the author felt that the appropriate price for the
analysis would be the terminal market prices reported by New York
state Agriculture and Markets [3].
Terminal market prices as compared to grower and/or f.o.b.
shipping prices are preferable because the weekly variation in these
latter prices is minimal compared to terminal market prices. In
addition, the demand side of the market, terminal market, is most
likely more influential on market shares at each eastern market than
the supply side, shipping point. It is assumed that the prices
reported by the western and Central New York Fruit and Vegetable
Report are reflective of when and where New York onions are sold.
The time period for the analysis was somewhat arbitrary and for the
sake of convenience. weekly prices between November 3, 1986 and
November 20, 1989 are the basis of the analysis. During many weeks
New York onion prices are not reported and it is assumed they are
not reported because no substantial amounts of New York onions moved
through the particular terminal market that particular week. This
would also apply to weeks in which prices for other sourcing states
are not reported. It is further assumed, that if a particular
market (i.e. Pittsburgh) is not reported during one particular week,
then New York onion arrivals were not important in that market
during that particular week. The price comparisons are only made
during weeks when a price is reported. For example, within the time
period of the analysis, there are 130-weeks. If prices are only
reported for, say 50-weeks, then the mean price for the time period
would be computed on the basis of 50-weeks not 130. Lastly, direct
weekly competition between New York onions and the principal
competitors are utilized for certain analysis (Table XVIII). Only
weeks with simUltaneous reporting of competitor and New York price
are used in this analysis.
What follows is a market-by-market analysis of the terminal
market prices for New York onions and their principal competitors.
Each table presents the mean price for the weeks the onion prices
are reported, the high and low prices, and the price variation
between the weeks the onion price is reported. The price variation
is an indicator of the volatility of the market for a particular
onion. One cannot infer that a relatively high price variation is a
result of unstable markets--for the reason may be the competition.
However, high price variability of one onion price versus another
indicates that a buyer may be more leery of purchasing a product
because of the greater price uncertainty.
IV.A. Atlanta
Atlanta is not an important market for New York onions. On
average, it represents 0.5% of total New York shipments (2% of New
York arrivals) between January 1982 and December 1988. Table XI
presents the relevant prices identified in the Atlanta market.
Surprisingly, New York onion arrivals had the highest average
prices. However, only during 5-weeks were New York onions sold in
Table.XI ... WEEKLY PRICES OF VARIOUS DRY ONION ARRIVALS IN ATLANTA-­
NOVEMBER 3, 1986 TO NOVEMBER 20, 1989
SOURCING STATE
AND ONION SIZE
NUMBER OF
WEEKS PRICE
IS REPORTED
MEAN
PRICES
HIGH
LOW
COEFFICIENT
OF PRICE
VARIATION*
--$ PER 50 Ibs. BAG-­
COLORADO
"jumbo"
12
$8.26
$9.25
$6.25
0.086
IDAHO-OREGON
"jumbo"
20
8.87
13.00
6.25
0.485
5
10.37
14.50
5.50
1.135
13
9.46
19.75
5.63
2.652
NEW YORK
"medium/repacker"
TEXAS
"jumbo"
*--Price variance divided by price mean
N
lJ1
26
Atlanta. The inference may be that only during a relatively good
market will New Yorkers ship to Atlanta, but the fact that the low
price was $5.50 indicates that may not be the only reason. A more
plausible reason may be that the competitors sell in Atlanta during
periods of over supply. The price variation of New York onions is
in-between the highest--Texas--and the lowest--Colorado.
XV.B. Baltimore
The Baltimore market is a relatively more important market to
New York--3.S% of total shipments (10% of arrivals) between 1982 and
1988. Table XII presents findings which indicate New York
'medium/repacker' onions sold in Baltimore during 78-weeks and the
'large' onions for only 2S-weeks. On average, New York 'large'
onion prices were 16% higher than 'medium/repacker' prices.
Michigan onions are the most similar onions to New York's and their
prices were very similar to New York's. The average price of Idaho
'jumbo' onions was only 1.3% higher than New York's 'large' onions
and Colorado 'jumbo's' were almost the same price as New York's
'large'. only Texas 'jumbo' (not a New York competitor) prices were
significantly higher. The implication is that New York onions
compete rather well in the Baltimore market. In addition, since the
Baltimore market is important to New York shippers it is therefore
imperative that the competitive position in Baltimore be maintained.
XV.c. Boston
Based on the number of weeks prices are reported for New York
onion arrivals, Boston is where the largest number of New York
onions are sold. Table XIII presents the results which indicate
that Boston represents 7% of total New York shipments (20%
of arrivals) between 1982 and 1988. No doubt, the Boston market is
very important to New York shippers. New York 'large' onions sell
for a price 15% higher than New York 'medium/repacker' onions, but
more importantly for only 1.2% less than Idaho 'jumbo' and 7.4%
higher than Colorado 'jumbo's'. Unfortunately, most New York onion
arrivals in Boston are 'medium/repacker', but these onions obtained
a price of $15.00 per SOlbs bag during one week. It appears that if
New York could market more 'large' onions they would compete very
well in the Boston market. Also, the 'medium/repacker' market is
relatively strong and should not be ignored.
XV.D. Buffalo
Buffalo is now an inconsequential market for New York
onions--only 1.3% of total New York shipments (5% of arrivals).
Price wise, the $6.89 mean price for New York 'medium/repacker'
arrivals is the lowest price in the seven markets analyzed (see
Table XIV). However, the prices for the other onions are relatively
higher in Buffalo than in the other markets in the east. One
implication is that even at relatively low prices New York onions
Table XII ... WEEKLY PRICES OF VARIOUS DRY ONION ARRIVALS IN BALTIMORE-­
NOVEMBER 3, 1986 TO NOVEMBER 20, 1989
SOURCING STATE
AND ONION SIZE
NUMBER OF
WEEKS PRICE
IS REPORTED
MEAN
PRICES
HIGH
LOW
COEFFICIENT
OF PRICE
VARIATION*
--$ PER 50 lbs. BAG-­
COLORADO
"jumbo's"
18
$8.26
$11.50
$5.88
0.253
IDAHO-OREGON
"jumbo's"
93
8.32
18.00
3.75
0.618
MICHIGAN
"medium/repacker"
34
7.44
10.00
6.00
0.168
'"
--J
MICHIGAN
"large"
12
8.20
10.00
7.00
0.129
NEW YORK
"medium/repacker"
78
7.07
14.50
3.75
0.311
NEW YORK
"large"
25
8.21
14.00
6.00
0.582
TEXAS
"jumbo's"
14
10.32
20.50
5.75
2.005
*--Price variance divided by price mean
TABLE XIII ... WEEKLY PRICES OF VARIOUS DRY ONION ARRIVALS IN BOSTOM-­
NOVEMBER 3, 1986 TO NOVEMBER 20, 1989
'.
SOURCING STATE
AND ONION SIZE
NUMBER OF
WEEKS PRICE
IS REPORTED
MEAN
PRICES
HIGH
LOW
COEFFICIENT
OF PRICE
VARIATION*
--$ PER 50 lbs. BAG-­
CALIFORNIA
"medium"
29
$9.31
$14.50
$8.00
0.113
COLORADO
"jumbo"
31
8.25
10.25
6.00
0.161
IDAHO-OREGON
"jumbo"
91
8.91
18.50
5.00
0.641
MICHIGAN
"medium"
NEW YORK
"medium/repacker"
NEW YORK
"large"
CD
4
1.25
1.50
6.50
0.034
104
1.10
15.00
4.25
0.488
10
8.86
15.00
5.50
1.435
12
13.05
20.11
8.00
2.013
TEXAS
"jumbo"
'"
*--Price variance divided by price mean
Table XIV ... WEEKLY PRICES OF VARIOUS DRY ONION ARRIVALS IN BUFFALO-­
NOVEMBER 3, 1986 TO NOVEMBER 20, 1989
SOURCING STATE
AND ONION SIZE
NUMBER OF
WEEKS PRICE
IS REPORTED
MEAN
PRICES
HIGH
LOW
COEFFICIENT
OF PRICE
VARIATION*
--$ PER 50 lbs. BAG-­
COLORADO
"jumbo"
15
$9.33
$9.75
$7.75
0.031
IDAHO-OREGON
"jumbo"
37
9.89
19.50
6.50
0.930
NEW YORK
"medium/repacker"
30
6.89
10.50
4.50
0.274
l\J
\0
TEXAS
"jumbo"
2
9.38
*--Price variance divided by price mean
11. 25
7.50
0.749
30
lost market share in Buffalo. Conversely, one can postulate that
the reason New York lost market share in Buffalo was because it was
selling the poorest quality onions in the market and the receivers
chose to buy other higher quality products. Perhaps the most
revealing aspect of Buffalo prices is the relative similarity of the
three 'jumbo' mean and low prices, even though a wide gap exists
between the high prices. The Idaho high price is nearly twice as
high as the other two 'jumbo' prices.
IV.B. Bew York City
The New York City terminal market represents 11.2% of total
New York shipments (25% of arrivals) over the 1982-1988 time period.
It is the largest market in the country. There are particular
"oddities" in this market (Table XV presents the prices). New York
'medium/repacker' mean price is 6% higher than the New York 'large'
price, 13% higher than the Michigan 'medium/repacker' price, 6%
higher than the Colorado 'large' price, and 3% higher than the
Colorado 'jumbo' price! In no other eastern market is the New York
'medium/repacker' arrival price as good as in New York City.
Another anomaly is that the Michigan 'large' mean price is the
highest price during the fall and winter (Texas supplies
spring/summer). Why would these price differentials exist? First,
as mentioned in section III.B., Idaho was the sourcing state that
captured the largest market share gains in New York City. Since the
Idaho 'jumbo' mean price is only 8% above New York's
'medium/repacker' price and slightly less than the Michigan 'large'
price, it is difficult to put forth an argument indicating
Idaho onions were undercutting the competition. The preceding
coupled with the relatively high price of New York 'medium/repacker'
onions infers that onion type rather than size is mostly responsible
for the market share deterioration. The price variation
coefficients are similar in magnitude for most of the onions.
IV.F. Philadelphia
This market represents 5.1% of New York shipments (15% of
arrivals) between 1982-'88. Of all the eastern markets, this is
where Colorado onions have the most market penetration and the only
market where the Colorado mean price is higher than the Idaho-Oregon
mean price (See Table XVI). This particular outcome is somewhat
puzzling--what is it about the Philadelphia market that allows
higher prices for Colorado onions? In contrast to New York City,
New York 'medium/repacker' prices are the lowest priced and with the
next-least priced variation in the market. Also, Idaho-Oregon
onions arrive at a price 17% higher than New York onions--the same
price differential as in Baltimore and Boston. However, in Buffalo
the price differential is 44% while in New York City it is 8% and in
pittsburgh it is 13%. New York onion prices are quoted in half the
weeks of the time period--69 from a possible 130--weeks.
,
Table XV ... WEEKLY PRICES OF VARIOUS DRY ONION ARRIVALS IN NEW YORK CITY-­
NOVEMBER 3, 1986 TO NOVEMBER 20, 1989
SOURCING STATE
AND ONION SIZE
NUMBER OF
WEEKS PRICE
IS REPORTED
MEAN
PRICES
HIGH
LOW
COEFFICIENT
OF PRICE
VARIATION*
--$ PER 50 lbs. BAG-­
COLORADO
"jumbo"
8
$8.27
$9.75
$7.25
0.141
COLORADO
"large"
3
8.00
8.50
7.50
0.031
90
9.16
20.25
5.50
0.727
IDAHO-OREGON
"jumbo"
w
......
MICHIGAN
"medium/repacker"
26
7.52
11.50
4.75
0.408
MICHIGAN
"large"
11
9.20
14.25
6.50
0.763
NEW YORK
"medium/repacker"
63
8.49
17.00
4.50
0.581
NEW YORK
"large"
47
7.99
16.00
5.88
0.622
TEXAS
"jumbo"
12
10.72
19.50
5.75
0.947
*--Price variance divided by price mean
Table XVI ••. WEEKLY PRICES OF VARIOUS DRY ONION ARRIVALS IN PHILADELPBXA-­
NOVEMBER 3, 1986 TO NOVEMBER 20, 1989
'
SOURCING STATE
AND ONION SIZE
NUMBER OF
WEEKS PRICE
IS REPORTED
MEAN
PRICES
HIGH
LOW
COEFFICIENT
OF PRICE
VARIATION*
--$ PER 50 lbs. BAG-­
COLORADO
"jumbo"
34
$8.87
$13.00
$5.88
0.244
77
8.67
12.50
5.50
0.348
8
8.19
10.00
6.88
0.147
69
7.43
11.25
4.25
0.219
14
9.15
13.00
5.75
0.690
IDAHO-OREGON
"jumbo"
MICHIGAN
"large"
I\J
NEW YORK
"medium/repacker"
TEXAS
"jumbo"
*--Price variance divided by price mean
w
33
IV.G. Pittsburgh
Pittsburgh is similar to Buffalo in importance to New York
shippers in both volume and in the number of weeks that New York
onion prices are quoted. The most surprising observation is the low
Te~as 'jumbo' prices and corresponding price variation.
In all
other markets, Texas onions generally commanded the highest prices
(see Table XVII). The author has very little insight as to why this
would be. The other unusual price situation are the low price
variation coefficients--the lowest of all the markets. Why? One
possible explanation may be the relatively few number of receiving
firms in this market as compared to the others. New York arrivals
are better priced than Michigan onions--both 'large' and
'medium/repacker'.
IV.H. Direct Weekly Price comparisons.
The previous city price analysis did not take into account the
weeks in which New York onions were quoted as compared to when the
competitor prices were quoted. The following analysis only utilizes
prices for weeks in which New York onion prices are simultaneously
quoted with competitor prices (i.e. 'head-to-head' competition).
This is a more direct measure of how price competitive New York
onions are. Also, this type of analysis may reveal some pricing
opportunities for New York shippers. In some markets, only New York
price and its principal competitor price are compared while in
others an additional comparison is made with two competitors rather
than one. The reader should keep in mind that a total of 130-weeks
are available for the price comparisons. The average number of
weeks of the comparison is 45 with a high of 90-weeks in Boston for
'medium/repacker' and a low of 23-weeks in Baltimore for 'large'.
Table XVIII presents the price comparisons.
First, in all the market price comparisons, except New York City
arrivals from New York, Idaho-Oregon, and Michigan, the price of New
York onions is the lowest. The average percentage price
differential for all the comparisons is 13.4% lower for New York
onions as compared to competitor prices. As a side note, the Boston
market is where New York onion prices are quoted the most number of
weeks and the price differential there is 14.5% higher for
Idaho-Oregon 'jumbos' as compared to New York 'medium/repacker'.
The highest price differential is in Buffalo between New York
'medium/repacker' and Idaho-Oregon 'jumbo' prices and is 30% higher
for Idaho-Oregon onions. Buffalo is followed by
Pittsburgh--19.3%--and Philadelphia--18%. It is not necessarily
true that New York 'large' prices versus New York 'medium/repacker'
prices are consistently better. However, what is evident is that
the 'large' prices are more volatile than the 'medium/repacker'
prices. A striking difference between New York onions and its
competitors is found in the high price column. The highest prices
for non-New York onions are significantly higher than New York's
Table XVII .•. WEEKLY PRICES OF VARIOUS DRY ONION ARRIVALS IN PITTSBURGH-­
NOVEMBER 3, 1986 TO NOVEMBER 20, 1989
I
SOURCING STATE
AND ONION SIZE
NUMBER OF
WEEKS PRICE
IS REPORTED
MEAN
PRICES
HIGH
LOW
COEFFICIENT
OF PRICE
VARIATION*
--$ PER 50 lbs. BAG-­
COLORADO
"jumbo"
3
$9.04
$10.25
$7.88
0.156
61
9.02
17.50
4.00
0.875
24
7.09
8.50
5.50
0.062
IDAHO-OREGON
"jumbo"
MICHIGAN
"medium/repacker"
"large"
w
~
MICHIGAN
2
7.50
8.00
7.00
"medium/repacker"
37
7.96
13.00
5.50
0.436
TEXAS
"jumbo"
13
7.46
8.63
6.50
0.076
NEW YOU
*--Price variance divided by price mean
35
Table XVIII ... COMPARISON OF NEW YORK DRY ONION WEEKLY ARRIVALS PRICES
WITH MAJOR COMPETITOR(S) PRICES*-­
NOVEMBER 3, 1986 TO NOVEMBER 20, 1988
ARRIVAL
MARKET &
COMPETITOR
NUMBER OF
WEEKS PRICES
COMPARED
MEAN
PRICES
HIGH
LOW
PRICES
VARIABILITY
--$ PER 50 lbs. BAG-­
BALTIMORE
N.Y.- medium"
I.O.-"jumbo"
75
75
$7.07
7.97
$14.50
16.00
$3.75
3.75
0.322
0.412
N.Y.-"medium"
I.O.-"jumbo"
MICH.-"medium
33
33
33
7.19
8.43
7.45
9.62
10.25
10.00
5.37
3.75
6.00
0.186
0.172
0.174
BALTIMORE
N.Y.-"large"
I.O.-"jumbo"
23
23
8.23
9.69
14.00
18.00
6.00
6.00
0.609
1.109
BOSTON
N.Y.-"medium"
I.O.-"jumbo"
90
90
7.75
8.87
13.50
18.50
4.25
5.00
0.379
0.557
BUFFALO
N.Y.- medium"
I.O.-"jumbo"
27
27
6.84
8.88
10.50
14.00
4.50
6.50
0.298
0.292
NEW YORK CITY
N.Y.-"medium"
I.O.-"jumbo"
53
53
8.63
9.39
14.50
17.50
4.50
5.50
0.402
0.600
N.Y.-"medium"
I.O.-"jumbo"
MICH.-"medium"
23
23
23
8.27
8.91
7.48
10.63
11. 00
11.50
6.00
6.00
4.75
0.150
0.195
0.398
NEW YORK CITY
N.Y.-"large"
I.O.-"jumbo"
41
41
8.25
9.50
16.00
20.25
6.12
6.00
0.623
1. 009
PHILADELPHIA
N.Y.-"medium"
I.O.-"jumbo"
60
60
7.62
8.79
11.25
12.50
4.25
5.50
0.190
0.356
N.Y.-"medium"
I.O.- jumbo"
COLO.-"jumbo"
33
33
33
7.46
8.79
8.85
9.50
12.50
13.00
6.25
6.00
5.88
0.064
0.160
0.189
PITTSBURGH
N.Y.-"medium"
I.O.-"jumbo"
36
36
8.01
9.56
13.00
17.50
5.50
5.50
0.434
0.811
II
II
II
36
highest price. The inference being that when the market is short,
non-New York onions capture the premium prices much better than New
York onions. Conversely, the lowest prices are similar for all
shippers--when oversupply (low demand) conditions exist all arrivals
are priced similarly. No discernable pattern can be identified for
price variability nor its relationship to the pattern of mean
prices.
v.
Summary and Conclusions
The preceding analysis paints a rather bleak picture of New York
onions' competitive position in both the national shipments market
and in particular eastern u.s. cities terminal markets. Though the
analysis is only based on a segment of total onion shipments (95%)
and total onion arrivals (42%), it nonetheless can serve as an
indicator of patterns and/or market share changes in the onion
market. Caution should be exercised when attempting to use the
analysis for extrapolating absolute volume and price changes in the
future. What follows is a synthesis of what was found and possible
strategies to ameliorate the erosion of New York's market share(s).
During 1982, average monthly national dry storage onion
shipments were 2,178,000 cwt. By 1988 the national market had
increased by 27% to 2,768,000 cwt. During the same time period, New
York onion shipments declined by 36.7%--from 317,300 cwt to 200,250
cwt. In 1982, New York's share of the national onion shipments
market was 14.6% while in 1982 it dropped to 7.2%--half the market
share was lost over six years.
In the New York City market, New York onions maintained a 43%
arrival market share during 1982, but by 1988 the share dropped to
11.2%--a decline of 74%1 The corresponding percentage market share
declines in the other cities were: Boston--99.4%, Atlanta--95.7%,
Baltimore--57.3%, Philadelphia--46.5%, and Pittsburgh--37.1%. Since
New York onions lost significant market shares in an expanding
market, then what shipping states gained?
Between January 1982 and December 1988, average monthly onion
arrivals in New York City were 128,226 cwt and this volume
represents the largest market. Idaho, California and to a lesser
extent Oregon were the primary gainers in market share. Boston
arrivals averaged 81,667 cwt and the primary market share gainers
were Idaho and "Other States". The "Other states" is most likely
Georgia. Atlanta's average monthly arrivals were 70,289 cwt, but it
has not been an important market for New York shippers.
Philadelphia arrivals averaged 57,000 cwt and the gainers there were
Idaho, Colorado and Oregon. Baltimore arrivals averaged nearly
50,000 cwt per month and the 20.7 share points lost by New York were
gained by "Other States", Idaho and Colorado. Arrivals in
Pittsburgh averaged 26,500 cwt and the market share gainers there
were Idaho, Colorado and California. However, in Pittsburgh New
37
York only lost 9.2 share points while Texas lost 12.8 and Michigan
lost 5.8 share points. Therefore, the losers and gainers in the
Pittsburgh market are not as clear as in the other markets. Lastly,
Buffalo arrivals averaged 10,000 cwt and the gainers there were
"Other states" and Idaho. Contrary to many individuals'
perceptions, Canada & Mexico did not increase their market shares
significantly in any of the seven eastern markets.
Based on a different analysis--correlation coefficients (c.c.)
New York's primary shipment competitor was Michigan. In the New
York City market, no strong correlation coefficients were found
between New York arrivals and other sourcing states. However, c.c.
analysis only measures the pattern of month-to-month shipments and
not the quantities. Therefore, what the correlation coefficient
analysis indicates is that Michigan's within year pattern of
shipments most closely resembles that of New York shipments.
The first quarter of the year is the most competitive followed
by the fourth, third, and the second is the least competitive.
competition is defined by the dispersion of market shares (i.e. the
more spread the market shares the more competitive). Unfortunately,
New York markets its onion during the two most competitive guarters.
Prices were the most difficult to analyze, but some important
observations were noted and some inferences deduced. First, in
almost all of the seven markets when one compares the average price
of New York onions with the competitor price (comparisons based only
on weeks in which both New York and competitors are in the market),
New York onions were the lowest priced. However, the comparison is
primarily between New York 'medium/repacker' onions versus 'large',
but primarily 'jumbo' onions. No doubt, the 'jumbo' would command a
higher price. The average difference is about 17% higher for
'jumbo' onions versus New York onions. In the Atlanta market, a
market where very few New York onions are sold, the average prices
received for New York onions during the few weeks in which they
sold, were the highest. The Baltimore market is also a market where
New York onions receive relatively good prices versus the
competition. Buffalo was the worst price market for New York
onions. The Philadelphia market was the next worst price market for
New York onions. The Boston market was where New York onion prices
were quoted the most number of weeks (i.e. longest market presence)
and the 'medium/repacker' price was, on average, $1.16 per 50 lbs
bag less than the 'large' price. No doubt, more 'large' onions
could be sold in Boston. The opposite was true in New York
City--the 'medium/repacker' price was higher than the 'large' price.
In fact, the New York 'medium/repacker' average price in New York
City was higher than the average price for Colorado 'jumbo' and
'large' onions.
38
Another observation applicable to all the markets was that New
York onion prices were not as good in "high price" markets as were
the competition prices. conversely, in "low price" markets, New
York onions did just as poorly as everyone else. Lastly, no
patterns were identified between the variations in prices between
weeks and relative absolute prices.
:.
39
BIBLIOGRAPHY
•
.
1.)- Figueroa,
E.E. "The Competitiveness of New York state Onions
During
the
1987-1988
Marketing
Year" ,
Department
of
Agricultural Economics,
Cornell University Agricultural
Experiment station, New York state College of Agricultural and
Life Sciences, Cornell University, Ithaca, N.Y.
A.E. Res.
89-1. January 1989.
2. )
New York State Department of Agriculture & Markets, "western and
Central New York Fruit and Vegetable Report", Division of
Marketing, Rochester, N.Y. Various issues.
3.)
united states Department of Agriculture, Fresh Fruit and Vegetable
Arrival Totals: For 22 Cities, Agricultural Marketing Service,
Fruit and Vegetable Division, Market News Branch.
Various
Issues.
4.)
United states Department of Agriculture, Fresh Fruit and Vegetable
Shipments: By Commodities, States, and Months, Agricultural
Marketing Service, Fruit and Vegetable Division, Market News
Branch. Various Issues.
5.) United
States
Department
of
Agricul ture,
Vegetables
and
Special ties: situation and Outlook Yearbook, Economic Research
Service, TVS-249. November 1989.